Strategic Management
from different points
Dr.Vesselin Blagoev
Strategy lens
The strategy lenses
Johnson, Scholes and Whittington (2008):
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Design lens
Experience lens
Ideas lens
The discourse lens
The ‘design’ lens
• Also known as the classical, prescriptive,
deliberate, planned or rational approach.
• Exemplified by writers such as Ansoff and Porter
• Involves rational analysis using models/matrices
in an attempt to match the organization’s
capabilities to the environment
• Favoured by management because it is neat, selfcontained, tangible, looks like a technique
• Favoured by lenders and investors because it
gives the impression of providing ‘answers’ about
the future
• BUT – it is not a perfect representation of reality
The design lens assumes a rational
model of decision-making
Assumes that ‘rational economic man’
makes decisions that will maximize
return on investment
Also assumes:
• It is possible to gather all relevant
information
• Information is quantifiable
(Harrison and Pelletier, 1997)
The ‘Experience’ lens
Accepts that analysis is ‘coloured’ by
human irrationality, and taken-forgranted assumptions
• Strategies develop incrementally
• Strategies tend to mimic the past
GROUP THINK
IMPRESSION MANAGEMENT
RISKY SHIFT SYNDROME
The experience lens:
Bounded-rational model
of decision-making
• A perfect representation of reality is
not available
• Time and cost constraints
• Cognitive limitations
(Harrison and Pelletier, 1997, p. 360)
The experience lens:
Cultural influences on strategy
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National culture
Organisational field (industry level)
Divisional culture
Organisational culture
Departmental culture
Individual attributes
• Education, race, religion, gender, class,
nationality.
The ‘ideas’ lens
The ideas lens sees organizations as
evolutionary systems where the
organization’s survival rests on the
innovation process. New ideas must be
given breathing space otherwise they
will die.
Compare:
• The design lens views organizations as
tightly controlled systems/machines
• The experience lens views organizations as
cultures that do not break from the past
The ‘discourse’ lens
• How the ‘language’ of strategy
influences organizations
“The way in which we talk about strategy – as well as the
way in which we analyse particular actions that we
categorize as strategic have political implications.”
(Hardy et al, 2000, p1229)
Conclusion
• The different perspectives and lenses are
only a viewpoint. They are a different way
of looking at the same thing.
• They are all correct to some extent
• The classical school dominates because it
gives managers and students something
tangible to learn from but it doesn’t
necessarily reflect reality
• Strategies cannot be detached from the
people who formulated them.
Reasons for expanding
internationally
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Access low cost factors of production
Secure key supplies
Achieve economies of scale
Access skills and knowledge
Spread risk
Expand market
The fundamental questions
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Local or global approach?
Which market entry method?
Which country?
How should the business be
structured?
Foreign Market Entry Methods
To ascertain whether a particular country is a suitable location for a
particular part of the value chain – Porter’s Diamond can be used.
High
FDI
Risk
Strategic Alliances
Exporting
Low
Low
Control
High
National competitive advantage:
Porter’s Diamond
FACTOR CONDITIONS
Chance
Government
RELATED AND
SUPPORTING INDUSTRIES
DEMAND
CONDITIONS
STRATEGY,
STRUCTURE
AND RIVALRY
Source: (Hill, 2005)
Why does Bulgaria have relative international success in rose oil industry?
Why does Korea have relative international success in the mobile phone industry?
Why does France have relative international success in wine production?
Why does Italy have relative international success in leather goods?
National competitive advantage:
Porter’s Diamond
Chance
Basic are natural
resources, climate,
location, demographics
FACTOR CONDITIONS
RELATED AND
SUPPORTING INDUSTRIES
DEMAND
CONDITIONS
Climate might become
demand condition, i.e.
for mobile tel use
Government
STRATEGY,
STRUCTURE
AND RIVALRY
Source: (Hill 2005)
Why does Bulgaria have relative international success in rose oil industry?
Why does Korea have relative international success in the mobile phone industry?
Why does France have relative international success in wine production?
Why does Italy have relative international success in leather goods?
International structure types
• International organizations have structures that to
some extent derive from their ‘administrative
heritage’
• The structure will tend to reflect the degree of local
adaptation and global integration that is being
sought but it could be that the strategy actually
developed around the already existing structure
It is debatable whether structure
is following strategy (Chandler)
or strategy following structure
Transnational characteristics
• There is not a rigid organizational structure –
it evolves
• Follow a global or local approach depending
on the situation
• Encourage knowledge sharing and
innovation in all directions
• Develop ‘centres of excellence’ that can
provide a specific skill to the whole
organization
Risk of incremental
approach: Strategic drift
Amount
of
Change
Environmental
Change
DRIFT
Strategic
Change (incremental)
Time
Frameworks for understanding
how strategies come about
• Whittington
• Mintzberg et al (The Strategy Safari)
• Johnson, Scholes and Whittington (2008)
Four ‘lenses’ for understanding how
strategies come about – this is a reworking
of previous frameworks
Perspectives on strategy: Whittington
Outcomes
Profit maximizing
CLASSICAL
EVOLUTIONARY
Processes
Deliberate
Emergent
SYSTEMIC
Whittington, 2002, p.10
PROCESSUAL
Plural
Mintzberg et al –
Ten approaches to strategy
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The design school
The planning school
The positioning school
The entrepreneurial school
The cognitive school
The learning school
The power school
The cultural school
The environmental school
The configuration school
Finally…
Should organizations have
a strategy at all?
“… strategies are to organizations what
blinders are to horses: they keep them going
in a straight line but hardly encourage
peripheral vision.”
Mintzberg (1998, p.18)